Beckham Corporation is planning its debt maturity mix. Management has chosen a debt-equity mix consisting of $50,000 of liabilities and $75,000 of owners' equity. The yield curve is currently upward sloping: the interest rate on short-term debt is 7% and the interest rate on long-term debt is 11%. Beckham has $60,000 of current assets, anticipates EBIT of $20,000 and has a 30% tax rate.

If Beckham moves toward using more current liabilities and less long-term liabilities:

A. Its return on equity would increase.

B. Its liquidity risk would decrease.

C. It would increase its current ratio.

D. It would have to increase owner's equity.